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Our company adopted a SIMPLE IRA plan with a designated financial institution using Form 5305-SIMPLE. Can the participants choose a different financial institution for their SIMPLE IRA accounts?
Yes, participants can transfer their SIMPLE IRA account balances to another financial institution without costs or penalties. However, you must continue depositing future employer and employee SIMPLE IRA plan contributions to their SIMPLE IRA at the designated financial institution.
By using Form 5305-SIMPLE, Savings Incentive Match Plan for Employees of Small Employers (SIMPLE) - for Use With a Designated Financial Institution, to establish your plan, you and the designated financial institution agreed: